Q28PGA_C - Horngren'S Financial And Managerial Accounting

Question

Clement Manufacturing makes carrying cases for portable electronic devices. Its costing records yield the following information:

Job No.	Date	Total cost of Job at October 31	Total manufacturing costs added in November
Started	Finished	Sold
1	10/03	10/12	10/13	\(1,300
2	10/03	10/30	11/01	1,400
3	10/17	11/24	11/27	1,000	\)900
4	10/29	11/29	12/03	1,200	1,200
5	11/08	11/12	11/14		650
6	11/23	12/06	12/09		500

Requirements

3. Prepare journal entries to record the transfer of completed jobs from Work-in-

Process Inventory to Finished Goods Inventory for October and November.

Step-by-Step Solution

Answer

Date	Particulars	Debit ($)	Credit ($)
October 31	Finished goods inventory	1,400
	Work-in-process inventory		1,400

 

Date	Particulars	Debit ($)	Credit ($)
November 30	Finished goods inventory	2,400
	Work-in-process inventory		2,400

Step 1: Finished goods inventory as on October 31

$\begin{array}{c}\mathbf{Finishedinventory}\mathbf{=}\mathbf{TotalcostofJobNo}\mathbf{.}\mathbf{2}\\ =\$1,400\end{array}$

Step 2: Finished goods inventory as on November 30

$\begin{array}{c}\mathbf{Finishedinventory}\mathbf{=}\mathbf{TotalcostofJobNo}\mathbf{.}\mathbf{4}\mathbf{Inoctober}\mathbf{+}\mathbf{TotalcostofJobNo}\mathbf{.}\mathbf{4}\mathbf{Innovember}\\ =\$1,200+\$1,200\\ =\$2,400\end{array}$

The recording of transfer of completed job from work in process inventory to finished goods inventory is done by debiting the finished goods inventory and by crediting the work-in-process inventory.